Still On MTN, NCC Face-off

mast• Telecoms Giant Still Counting Loses • Those Who May Benefit

ALTHOUGH, majority of Nigerians are of the opinion that Telecommunication giant, MTN, deserve the punishment from the National Communication Commission (NCC), which asked it to pay a whooping N1.04 trillion for violating regulations relating to SIM Card registration, few others believe that the fine is on the high side.
Those who said the punishment is in order condemned the company for being too arrogant and not customer friendly.

The telecommunications firm was accused of harbouring illegal database being used by kidnappers, insurgents, miscreants, armed robbers and other criminals to commit crimes, as discovered by operatives from State Security Service (SSS).

Authoritative source said a meeting was held at the NCC headquarters, on August 4th, after the discovery by SSS in Abuja. All the stakeholders were in attendance, including top NCC officials; members of the SSS and officials from the office of the National Security Adviser.

“Can you imagine that MTN sent junior officers to attend such an important meeting? That meeting was at the instance of the office of the National Security Adviser and Director of State Service. This has become worrisome to the government that is trying to curtail the activities of insurgents. Also, when NCC Enforcement and Monitoring team went to MTN’s office for more checks, their officials declined to open their switches for inspection,” our source alleged

According to the source, the behaviour by the service provider infuriated the NCC team, who in their report indicted the telecommunications firm for not willing to cooperate in the deactivation of improperly and pre-registered SIM cards within the stipulated time, “so there was no option but to slam them with the fine.”

The Guardian further gathered that despite all the entreaties and warnings over a 12month period (from September 2014), on the importance of ensuring that only SIM cards with valid SIM registration details are active on telecommunications networks, MTN failed to comply with the directive to deactivate improperly registered subscribers.

The source said the fine was in line with sanctions stipulated by SIM Card Registration Code, Section 19 to 21, where it was stated that per SIM card found defective on the network, erring operator will be made to pay N200, 000.

Expert views on the fine

THE Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, said MTN, was yet to brief the Association on the development, adding that the fine could destroy the company if not reviewed.

“I don’t know how NCC arrived at the huge amount as fine. But I think government should urgently intervene, because it could affect further investments in the sector. It is a disincentive to investors and would have negative impact on the sector as a whole.”

He urged the operator and regulator to meet for amicable resolution of the matter.

The President of the Association of Telecoms Companies of Nigeria (ATCON), Lanre Ajayi, condemned the ‘outrageous’ sanction, saying it is unacceptable in a telecommunication industry, which is still looking for foreign investment to achieve optimal telecoms services.

“Yes, I have heard about this development and I don’t know where to place it. The board of the Association of Telecoms Companies of Nigeria (ATCON) has not met to look at the issue critically and to consider the implications to the industry.

“However, in my view, I believe strongly that there is nothing wrong in a regulator imposing a sanction on erring operator to ensure sanity in the market, but when such a regulatory tool is being abused, it calls for concern. The amount imposed on MTN is just, to say the least, outrageous and monumental. By the time you begin to impose a sanction, which value is worth more than half of the investment of the company, I am afraid, this does not send good signals to foreign investors and we need to take caution.”

The Chief Executive Officer of Consolidated Management Consultant, Dele Oguntebi, hailed the NCC on its action against MTN, saying it would send the right signal to other service providers operating in the country.

He urged the regulator to insist on the payment of the fine; describing it as a new dawn in the country, as laws will henceforth be implemented the way it is expected.

“I think they should pay because there are so many issues people will raise. The regulation is there, but they violated it deliberately. If they do that in other parts of the world, the penalty will be greater. It is only in Nigeria that people do things and get out of it. They have done it in the past. Penalty is another source of income for Nigeria. We are looking for money in this country now to run the government. This is another source of income for the government. If you don’t want to be a source of income, you must obey the regulations.

To the Chief Executive Officer, RTC Advisory Services Ltd, Mr. Opeyemi Agbaje, the huge fine on the telecommunication firm is unreasonable, although he agreed that the company should be penalised.

“I think the fine is unreasonably high. I agree that fine is necessary, but we should not create the impression that regulators are now using fines to generate revenue for the government. The fine is about 40 percent of MTN group’s income. I will prefer that the parties will sit down, discuss and arrive at reasonable conclusion on the matter. We should not send a message to other regulators that we can generate revenue from fines. We need strong and effective regulations based on integrity and public interest. A fraction of the fine will achieve the same objective, but this N1.4t is an extreme punitive measure,” he said.

Worries in South Africa

Meanwhile, the South African government has expressed worries about the situation. A cabinet minister in that country, Jeff Radebe, said; “This issue is between MTN and the Nigerian authority. Obviously, as government, we are concerned about this matter and we do hope the talks between MTN and the Nigerian authorities bear fruit.”

The Head of Parliamentary Telecommunications Portfolio in South Africa, Mmamoloko Kubayi, is of the view that efforts should channeled towards ensuring that the sanction did not eventually affect trade ties between the two countries.

“It is important for South Africa to increase trade relations with other African countries, but if something like this happens, we get worried about our reputation and the impact that would have on South African companies wishing to expand in the continent,” Kubayi stressed.

It could be recalled that in August, the quartet of MTN, Airtel, Glo and Etisalat, deactivated all lines with unregistered or improperly registered mobile subscriber data on their networks. About 10.7 million lines were disconnected. This later brought a deluge of crowds at the various services centres around the country, as subscribers tried to reconnect their lines.

Head of enforcement and monitory department of NCC, Idehen Efosa, disclosed that in September 2014, NCC discovered that from the SIM data the operators sent to the commission for hamonisation, some of them were defective and had to be returned to the operators for proper checks.

According to him, about 18.6 million SIM data were sent back to MTN Nigeria; 7.49 million to Airtel; 2.23 million to Globacom and 10.46 million to Etisalat.

Idehen, however, said the monitoring exercise done recently by the NCC showed that operators only showed partial commitment to the exercise.

According to him, out of the about 18.6 million SIM registration data found to be defective on MTN network, only about 1.6 million have been barred. He explained that what MTN actually did was to put the affected subscribers on “Receive Calls Only,” which means the subscribers cannot put a call through to another network. “During our visit to Airtel, the telecommunications service provider had fully barred 2.3 million from its network. These were SIM data found to be incomplete. At Globacom, 3.5 million lines were barred also from its network, although with assurance that others lines found to be defective on their networks would be deactivated in 24 hours.

“Etisalat barred 3.3 million and promised that within 24 hours, others found to be challenging will be removed totally from the networks,” he stated.
MTN shares plummet on JSE

PART of the after effect of the $5.2b fine has been the plummeting stock on the Johannesburg Stock Exchange (JSE). The company’s stock price dived into free fall when trading opened on the JSE on the day the story broke. The shares fell as much as 8.6 per cent to R144.20 in Johannesburg.

As at last week, the fallout of the penalty has resulted in the decline in MTN shares to about 16 per cent since the fine was made public two weeks ago, valuing the company at 289 billion rand ($20.4 billion).
Etisalat battles MTN over voice tariffs

If there is any MTN rival that may be very happy about its travail, it certainly will be Etisalat, which has been at loggerheads with it over a service affecting its voice revenue.

Etisalat Nigeria dragged MTN Nigeria to court over a promotion it claimed the telecommunications firm was infringing upon.

In the main suit, Etisalat sought a review of a decision said to be recently taken by NCC, allowing 30 per cent differential between MTN’s off-net and on-net retail mobile voice tariffs.

According to Etisalat, with the said 30 per cent differential between its off-net and on-net retail mobile voice tariffs, MTN had been able to create what is called a “calling club,” an example of which is its ‘Family and Friends’ promo.

Etisalat is contending that MTN’s ‘Family and Friends’ promo, which offers a call rate of 11 kobo per second to eight MTN subscribers and two non-MTN subscribers, is posing a threat to its business survival.

It explained that the ‘Family and Friends’ promo, which it claimed was launched in violation of NCC’s regulation, had aided MTN to leverage on its size to restrict outgoing traffic to smaller operators by pricing on-net tariffs lower, so as to make off-net calls unattractive.

Etisalat also claimed that this 30 per cent differential in on-net and off-net retail mobile voice tariffs, granted MTN by NCC, was a breach of NCC’s regulation tagged the Determination of Dominance in Selected Communications Markets in Nigeria.
MTN replaces Nigerian call centre operator with an Indian firm

THE embattled telecommunications firm had a few months back withdrew the services of an indigenous outsourcing firm, CNSS, which previously handled its call and contact centres and gave it to an Indian firm, ISON.

That singular act put the work of an estimated 4,000 call centre agents, working with MTN Nigeria, on the line.

CNSS ltd, provided a full complement of in-and out-bound call centre operations, service delivery and management services, encompassing specific services for various business sectors. CNSSL also provided back office processing, consulting and training and development services and has employed over 6,000 Nigerians through its local operation.

It was gathered that the call centre agents’ concerns emanated from the feelings that the move by MTN to transfer the call centre operation job from an indigenous firm, CNSSL, to the Indian company could lead to ‘enslavement and poor staff welfare.’ Some of the call centre agents expressed reservations about the telco’s move, saying staff restructuring by Ison would lead to possible loss of jobs for some agents.

“We have heard about the plan by MTN to take the call centre job from the company that currently manages its call centre operations, which we work with, that is CNSSL. CNSSL is an indigenous company and now, MTN is taking the job from the local company to an Indian firm. So, this calls for serious worries,” a female agent at one of the call centre of CNSSL said.

She explained further that, “Under an Indian company, we don’t think our welfare would be well taken care of. Indian guys are used to maximising profits at the expense of their employees.”

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  • Sola

    If the fine is in line with SIM Card Registration Code then NCC is justified. There is no emotion or sentiments involved in this. Just imagine if its a Nigerian company that did this in South Africa.

  • amador kester

    Of wha t use is a nstion if it cannot enforce regulatory mechanisms? If companies defy regulation it is only to the extent that they view it as emanating from a caricature of a nation booming in noise. This is a general comment not directed at any particular company

  • ikpo mari

    Emotion or sentiment cannot resolve the matter.
    MTN must pay the fine and pay the whole amount. That will serve as a lesson to
    other providers in the country who are impunity driven… Can South Africa
    allow a Nigerian company in their country to sack the indigenous company that
    employed thousands of their people only to give it to a foreign company? We all
    know the Indians in business environment in Nigeria. Indian companies are
    exploiters all over the world. They don’t pay their employees minimum wage.
    They are cheats. The directive from NCC is to protect Nigerian national
    security. The MTN has no respect for Nigerians and therefore they must pay the
    fine or pack and go.

  • emmanuel kalu

    All those industry stakeholder calling the fine unreasonable and bad, need to read the rules and law set by NCC. All other companies complied and even gave assurance that if they found wanting, they would correct it in 24 hrs. why didn’t MTN do that? because they think they are above the LAW. No matter how much investment you bring to Nigeria, NO company should be considered above the law. NCC did the right thing and they should not reduce the fine by any amount. This would send a very clear message to other companies and investor. Nigeria is not the wide wide west, where you disobey the law.